VZCZCXYZ0001
PP RUEHWEB

DE RUEHNY #0574/01 2611239
ZNR UUUUU ZZH
P 181239Z SEP 09
FM AMEMBASSY OSLO
TO RUEHC/SECSTATE WASHDC PRIORITY 7796
RUCPDOC/USDOC WASHDC

UNCLAS OSLO 000574 
 
STATE FOR EUR/NB, EEB 
 
STATE PASS USTR 
 
COMMERCE FOR JENNIFER DERSTINE 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: BEXP KIPR ETRD EINV EPET ENRG NO
SUBJECT:  COMMERCE DESK OFFICER FOLLOWS UP INFORMAL COMMERCIAL 
EXCHANGE (ICE) TALKS 
 
¶1.  (SBU) Summary:  Commerce Nordic/Baltic desk officer Jennifer 
Derstine met with industry and GON representatives on a range of 
issues covered in the bilateral Informal Commercial Exchange (ICE) 
framework during her September 7 to 9 visit to Oslo.  There has been 
limited progress on some elements of the ICE agenda, but no 
breakthroughs on longstanding problems such as intellectual property 
protection.  The GON showed realism in its comments on Norwegian 
industrial participation in the Joint Strike Fighter (JSF) 
procurement.  Derstine was accompanied by FCS Chief and Deputy 
PolCouns in her meetings.  Readout of Derstine's meetings with 
industry representatives will be transmitted septel.  Please see 
para 11 for an Action Request to the Department of Commerce 
regarding the Jones Act.  End Summary. 
 
Tour d'Horizon with Norwegian Government Representatives 
---------------------------------------- 
 
¶2.  (U) Derstine discussed the range of commercial issues on the ICE 
agenda with a GON interagency group led by Ole Andreas Lindeman, 
Deputy Director General, Ministry of Trade and Industry in Oslo on 
September 9.  The group included representatives from the Norwegian 
ministries of health, finance and energy. 
 
¶3.  (U) Segway:  FCS Chief registered concern that there has been 
virtually no progress on Segway's efforts to gain Norwegian 
regulatory approval.  Lindeman informed that the Transport Ministry 
in a letter dated September 8, 2009, had responded to Segway's 
complaint dated December 18, 2008, regarding the Norwegian Public 
Roads Administration's initial decision to give only a very limited 
approval for guided tours in the Bodx region of Northern Norway. 
Lindeman handed over a copy of this letter, which proved to provide 
only minor concessions beyond those included in the first response 
to Segway's application.  Following the April 2009 ICE talks, the 
Ministry of Trade and Industry had approached the Transport Ministry 
on the issue of how to get wider approval for Segway use in Norway, 
but the Norwegian traffic authorities were not able to give any 
positive signals, pointing to their assessment of already congested 
pedestrian and bicycle lanes in Norway and that Segway's use and 
safety track record in Sweden was inapplicable to the vehicles' 
potential use in Norway.  The Transport Ministry, however, was open 
to Segway applying for other, limited use areas in Norway as a way 
for the Norwegian authorities to gain further experience on Segway's 
use in Norway. 
 
¶4.  (U) Nemko:  This Norwegian firm, which is seeking regulatory 
approval as a recognized testing facility in the United States, has 
made contact with the U.S. Occupational Safety and Health 
Administration (OSHA).  Lindeman said the case appears to be on its 
way to resolution.  Derstine cautioned that approval was not yet 
assured.  Should Nemko face pushback in their attempt to get a 
timeline for the regulatory approval process from OSHA, Derstine 
offered to help get timeline information from OSHA. 
 
¶5.  (SBU) Nonrefillable Bottle Tax:  Derstine acknowledged that the 
EFTA surveillance authority had dropped its investigation into 
Norway's tax, but pointed out that the environmental impact of use 
of nonrefillable bottles has been shrinking as more of the bottles 
are manufactured with recycled or organic materials and as the 
public's return rate for these bottles in Norway has increased.  The 
Finance Ministry representative stated that he considers the case to 
be closed, though he said he would keep an open mind if research 
(planned by industry) shows that nonrefillable bottles have a lower 
environmental impact than previously assumed.  Note:  The Coca-Cola 
representative told us earlier that such a study could be completed 
over the next several months. 
 
¶6.  (SBU) Automotive Taxation/Standards:  On industry concerns about 
Norwegian carbon dioxide emissions taxes, the Finance Ministry 
representative said the final Norwegian government budget, still 
under development, would contain amendments establishing a procedure 
for independent laboratories to document emissions according to 
European standards (this information is close hold).  This would 
create the possibility for some U.S. autos to be imported at lower 
tax rates.  On the new EU motor vehicles directive, the GON 
confirmed that it will await the recommendation of an EU working 
group looking at how to treat imports of non-EU type approved, new 
vehicles and whether or not to carry forward an exemption for third 
party used vehicles, similar to what is currently found in Paragraph 
1-15 in the Norwegian legislation on motor vehicles.  Regarding 
Norway's current regulations barring large U.S. trucks on safety 
grounds, Commerce asked the Norwegian side to explain Norway's 
safety concerns.  Lindeman said he would follow up with the 
Transport Ministry on this.  Commerce also informed the Norwegians 
that it was facilitating a visit for GON transport officials to a 
 
U.S. motor vehicle bureau to exchange information on safety 
regulation implementation. 
 
¶7.  (SBU) Pharmaceuticals Issues:  The GON representatives claimed 
that they have had a productive dialogue with industry, but there 
has essentially been no movement on gaps in patent protection for 
pharmaceuticals.  The Health Ministry representative did note that a 
system to provide a six-month patent extension to compensate for 
industry testing for pediatric use of medicines should be adopted by 
early 2010.  (Note:  This is standard European practice and is 
sought by industry here.  End Note.) 
 
¶8.  (SBU) Joint Strike Fighter (JSF):  Lindeman spoke about 
Norwegian aspirations for industrial participation in the JSF 
procurement while recognizing that this program is based on best 
value rather than a traditional offset arrangement.  He noted that 
Parliament desires the procurement to have an industrial benefit for 
Norway commensurate with the cost of the planes (around USD 5 
billion).  Lindeman stated that Industry-Trade and Defense State 
Secretaries (Deputy Ministers) had good meetings with 
Lockheed-Martin (L-M) and U.S. officials during their recent trip to 
the United States.  The GON is looking for areas where Norwegian 
suppliers could meet L-M needs, including outside of F-35 
procurement, such as in space technology and the use of composites 
in non-defense commercial applications.  Lindeman assessed that 
there is a USD 1.9 billion gap between what Norwegian firms can 
realistically sell (about USD 3 billion) and the USD 5 billion in 
sales the Norwegians would like to realize in terms of industrial 
participation.  He informed us that the Ministry of Trade and 
Industry must report to Parliament that this gap is filled before 
Parliament will move to finalize the procurement.  Lindeman noted 
that L-M executives would visit Norway in November and that they 
would serve as joint organizers of an Industry Day here in November 
together with Innovation Norway. 
 
¶9.  (U) Energy Cooperation:  The Energy Ministry representative 
noted a bilateral energy MoU with the U.S. Department of Energy and 
highlighted continuing Norwegian interest in cooperation, but 
without offering specific suggestions.  Derstine noted U.S. interest 
in carbon capture and sequestration and green building standards. 
 
¶10.  (SBU) Intellectual Property:  Derstine relayed industry's 
desire for better enforcement, including dedicated enforcement 
staff, as well as a system enabling cooperation with internet 
service providers to allow industry to warn those infringing 
copyright.  The GON told us a new copyright law is under 
development, with a draft expected in early 2010.  Lindeman 
suggested that industry needed to do more to facilitate legal 
downloads of copyrighted works. 
 
¶11.  (U) ACTION REQUEST Re The Jones Act:  Lindeman relayed a 
request from the Consultative Shipping Group (CGS) to U.S. Customs 
to extend the comment period to 90 days (to October 16, 2009) on 
proposed amendments to the Jones Act, which CGS claims will 
adversely impact U.S. oil and gas operations as well as shipping 
interests (e-copy sent to desk & EEB).  Action Request for Commerce: 
 Please advise whether such an extension is possible. 
 
¶12.  (U) ICE Action:  The Norwegians suggested dropping the agenda 
item on competition concerns in the development of the Norwegian 
continental shelf from the ICE action plan.  Commerce agreed to 
review the status. 
 
¶13.  (SBU) Salmon:  Lindeman raised anti-dumping and countervailing 
duties (AD CVD) on fresh and chilled Atlantic salmon, but in a 
pro-forma manner.  He said Norway had not taken steps to encourage 
exports under the AD CVD order (which would enable a review of the 
order) so as to avoid giving legitimacy to the trade measures. 
 
¶14.  (U) Black Liquor:  The Norwegians thanked the U.S. side for the 
quick response to their inquiry on the use of the tax credit for 
alternative fuel mixtures by the U.S. pulp and paper industry. 
Derstine reconfirmed that Congress seems poised to let the use of 
this tax credit for pulp and paper production expire.  If Congress 
takes no action, pursuant to the existing statutory language, the 
tax credit will expire on December 31, 2009. 
 
¶15.  (U) Helicopter Procurement:  Acknowledging U.S. commercial 
interest in the project, GON representatives estimated that - 
despite an earlier timeline putting the Request for Qualifications 
(RFQ) in May 2009 - it would take at least one year and 
parliamentary approval to reach the RFQ stage for helicopter 
acquisition. 
 
¶16.  (U) POHS (Prohibition on Certain Hazardous Substances in 
Consumer Products):  Lindeman confirmed that Norway is still 
considering prohibiting the use of 10 hazardous substances, over and 
above what the EU has prohibited in its Restrictions on Hazardous 
Substances (RoHS) regulation.  Implementation has been postponed due 
to the magnitude of comments and concerns on the legislation 
submitted to the Norwegian government.  Despite saying in April 2009 
ICE talks that a two-year implementation transition period was 
feasible, the Ministry of Trade and Industry now says that Norwegian 
regulations only permit a 6- to 12-month transition, though they are 
not required to have one at all, and that given the substantial 
delays already introduced, a shorter transition period is more 
likely to be introduced. 
 
¶17.  (SBU) Comment:  Although there were no breakthroughs on 
long-running trade problems, a cooperative spirit characterized the 
September 9 discussions.  Lindeman's realistic attitude toward 
industrial participation in the JSF program is a very welcome 
signal.  Post will work toward concrete progress on other ICE agenda 
items in the months before the next ICE meeting to be held sometime 
in the spring of 2010 in Oslo, Norway. 
 
HEG